Q. Can the baby sitting money I give her for college be considered as tax credits?
That's really two questions:
Q1. Can I claim the dependent care credit.
A1. Only if she does not qualify as your dependent.
Q2. Can I claim the Education (tuition) credit?
A2. Only if you are claiming her as a dependent. It doesn't matter who paid her tuition, the tuition credit goes with the student's dependency. Although the general rule, in taxes, is that you must be the one making the payment, to get the deduction or credit, there is an exception for education.
There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.
You cannot claim the (up to) $1000 refundable credit if you are, or can be, claimed as a dependent by someone else.
